First Holdco Plc · NSENG:FIRSTHOLDCO
First Holdco — FBN Holdings — FY2017 and Q1 2018 Earnings Presentation
38 slides from First Holdco's earnings presentation, 2018
Slide 1: FBNHoldings Full Year 2017 and First Quarter 2018 Results
FBNHoldings Full Year ended 31 De First Quarter endec
Slide 2: Disclaimer
Disclaimer This presentation is based on FBN Holdings Plc’s (‘FBNH’ or ‘FBNHoldings’ or the ‘Group’) audited IFRS results for the twelve months ended 31 December, 2017 and the unaudited results for the three months ended 31 March, 2018. FBNHoldings has obtained some information from sources it belie
Slide 3: Outline
Outline FY 2017 & Q1 2018 Highlights 04 Financial Review 10 Risk Management 15 Business Group Performance 20 Group Strategy 24 Outlook & Guidance 30 Appendix 33
Slide 4: FY 2017 & Q1 2018 Highlights
FBNHoldings B- FY 2017 & Q1 2018 Highlights
Slide 5: FY 2017 and Q1 2018 Key result highlights
FY 2017 and Q1 2018 Key result highlights HIGHLIGHTS FY 2017 Q1 2018 Gross earnings of N595.4 billion, up 2.3% y-o-y, driven by an increase in Gross earnings of N138.9 billion, down 1.6% y-o-y, on the back of declining interest income on the back of enhanced yields and volume growth in yields on
Slide 6: Steady progress in performance with focus on long term value creation
Steady progress in performance with focus on long term value creation HIGHLIGHTS INCOME STATEMENT 1 Gross earnings (N bn) Net interest income (N bn) Operating income (N bn) Profit before tax (N bn) 469.9 444.8 581.8 595.4 331.5 56.8 141.0 138.9 304.4 104.5 100.5 20.0 18.8 80.3 75.7 22.9 FY 16 FY 17
Slide 7: Improvements in risk governance and operational efficiencies
Improvements in risk governance and operational efficiencies HIGHLIGHTS KEY RATIOS NPL ratio1 Cost of risk NPL coverage CAR2 (Basel 2) 24.4% 68.2% 22.8% 10.4% 61.9% 21.5% 57.3% 18.0% 6.4% 4.5% 17.8% 17.7% FY 16 FY 17 Q1 18 FY 16 FY 17 Q1 18 FY 16 FY 17 Q1 18 FY 16 FY 17 Q1 18 Gross loans to deposits
Slide 8: Improving macro economic environment
Improving macro economic environment HIGHLIGHTS Economy exits recession as headline inflation gradually Growth in foreign reserves supported by rising crude oil price moderates and production volume External reserve (USDbillion) Crude oil price (USD/pb) % Crude oil production (mbpd) GDP Growth Infla
Slide 9: Navigating an evolving regulatory landscape
Navigating an evolving regulatory landscape HIGHLIGHTS Nigeria Interbank settlement Central Bank issued revised PenCom and FRC1 system launched iTeller, an guidelines to commercial directs PFAs to automated clearing system banks on internal capital adopt IFRS that allows bank cheques to adequacy and
Slide 10: FY 2017 & Q1 2018 Financial Review
FY 2017 & Q1 2018 Financial Review
Slide 11: Resilient earnings in spite of declining yields
Resilient earnings in spite of declining yields FINANCIAL REVIEW Gross earnings breakdown (Nbn) 1 Net interest margin drivers Interest Income Non Interest Income Cost of funds Asset yield Net interest margin (NIM) +2.3 y-o-y 11.7% 11.7% 12.1% 12.3% 12.0% 10.5% N595 N582 -1.6 126 y-o-y 7.2% 177 N439
Slide 12: Continuous focus on realising further efficiencies
Continuous focus on realising further efficiencies FINANCIAL REVIEW Operating expense (Nbn) FBNHoldings N55.7 N60.9 N58.8 N62.7 N56.4 60% 70 53.3% 56.1% 60 50% 55.4% 53.7% 51.7% 50 40% Nbn 40 30% 30 20% 20 10% 10 0% 0 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Operating expenses Cost to Income • Operating expens
Slide 13: Strong retail franchise with robust and well diversified funding base
Strong retail franchise with robust and well diversified funding base FINANCIAL REVIEW Funding by type (Nbn) Deposits by type (Nbn) FBNHoldings FBNHoldings Deposits from Banks Deposits from customers Financial investment liabilities Borrowings Other liabilities Equity Current accounts Savings accoun
Slide 14: Optimising the balance sheet
Optimising the balance sheet FINANCIAL REVIEW Balance sheet efficiency Capital ratios FirstBank (Nigeria) Leverage (times)1 Gross loans to deposits Total RWA (N'bn) CAR - FBN Liquidity (FirstBank - Nigeria) 77.1% 77.8% 77.7% 72.5% 74.5% 67.3% 17.8% 17.8% 17.6% 17.2% 17.7% 18.0% 52.7% 53.5% 51.1% 50.
Slide 15: Risk Management
FBNHoldings B- Risk Management
Slide 16: Sectoral breakdown of loans and advances to customers
Sectoral breakdown of loans and advances to customers RISK MANAGEMENT Q118 FirstBank (Nigeria) gross loans by sector Q118 FBNQuest Merchant Bank gross loans by sector Manufacturing 9.6% [10.9%] Agriculture 10.1% [9.0%] 2.4% 4.4% Construction 4.8% [4.6%] 9.6% 3.4% 10.1% Manufacturing 33.3% [33.4%] 5.
Slide 17: Diversified risk assets base across strategic business lines and groups
Diversified risk assets base across strategic business lines and groups RISK MANAGEMENT 1 FBNHoldings gross loans by business groups FirstBank (Nigeria) gross loans by SBU (Nbn) Commercial Banking Merchant Banking & Asset Management Retail banking Public sector Corporate banking Commercial Banking T
Slide 18: Effective profiling and management of the loan book portfolio
Effective profiling and management of the loan book portfolio RISK MANAGEMENT Loans and advances by currency Loans and advances by type FirstBank (Nigeria) FirstBank (Nigeria) FCY LCY Overdrafts Term Loans Commercial loans 5.5% 3.9% 3.3% 3.7% 3.0% 3.3% N1,933 N1,953 N1,786 N1,854 N1,838 N1,784 58.6%
Slide 19: Improving coverage
Improving coverage RISK MANAGEMENT Asset quality ratios - FBNHoldings NPL coverage (including statutory credit reserve) NPL ratio Cost of risk 68.2% 61.9% 57.3% 58.8% 57.6% 52.7% 24.4% 26.0% 22.0% 22.8% 20.1% 21.5% 10.4% 4.8% 5.5% 5.6% 6.4% 4.5% FY 16 Q1 17 H1 17 9M 17 FY 17 Q1 18 Q1 18 NPL exposure
Slide 20: Business Group Performance
FBNHoldings B- Business Group Performance
Slide 21: Performance Review: Commercial Banking Group
Performance Review: Commercial Banking Group BUSINESS GROUP Income statement Evolution of Gross Earnings Nbn Nbn FY 16 FY 17 y-o-y % Q1 17 Q1 18 y-o-y % Commercial Banking Group Gross earnings 535.5 541.5 1.1 128.5 124.7 -3.0 Operating income 434.6 407.9 -6.1 95.6 90.6 -5.2 CAGR: 4.4% X% Impairment
Slide 22: Performance Review: Merchant Bank and Asset Management Group
Performance Review: Merchant Bank and Asset Management Group1 BUSINESS GROUP Income statement Evolution of Gross Earnings Nmn Merchant Banking and Asset Management Group Nmn FY 16 FY 17 y-o-y % Q1 17 Q1 18 y-o-y % Gross earnings 37,653 39,028 3.7 8,815 8,575 -2.7 CAGR: 13.4% Operating income 25,076
Slide 23: Performance Review: Insurance Group
Performance Review: Insurance Group1 BUSINESS GROUP Income statement Evolution of Gross written premium Nmn Insurance Group Nmn FY 16 FY 17 y-o-y % Q1 17 Q1 18 y-o-y % Gross premium written 12,103 23,097 90.8 5,906 8,422 42.6 Operating income 11,933 17,946 50.4 2,437 4,165 70.9 CAGR: 28.7% X% Operat
Slide 24: Group Strategy
FBNHoldings B- Group Strategy
Slide 25: Our vision, strategic priorities and goals
Our vision, strategic priorities and goals GROUP STRATEGY Vision: 2017 - 2019 FBNH has a clear vision to consolidate its position as the leading financial services Group in Middle Africa Focused on execution to achieve strategic targets within a defined time horizon Strategic Priorities Enhancing Re
Slide 26: Create digital competency and intra group collaboration to enhance revenue
Create digital competency and intra group collaboration to enhance revenue and drive growth GROUP STRATEGY Enhance revenue generation Key Objectives Progress Update 2019 Targets • Drive customer acquisition and retention Fastest growing USSD banking service ~20 million customers • Integrate and driv
Slide 27: Enhancing non-interest revenue growth from digital banking channels
Enhancing non-interest revenue growth from digital banking channels GROUP STRATEGY Growing revenue from Digital Banking channels USSD Banking Scheme Mobile Banking Platform (E- business contribution to Non-interest Revenue) Transaction value (N’ billion) Transaction value (N’ billion) 882.86 2,600.1
Slide 28: Sustain and elevate improvements in cost and capital efficiency
Sustain and elevate improvements in cost and capital efficiency GROUP STRATEGY Improve Operational Efficiency Key Objectives Progress Update 2019 Targets • Leverage technology to drive efficiency Cost containment sustained despite high CIR ≤ 50% across all business areas inflationary environment • O
Slide 29: Strengthen structural changes in the risk governance
Strengthen structural changes in the risk governance GROUP STRATEGY Enhance Risk Governance Key Objectives Progress Update 2019 Targets • Further strengthen risk culture and Institutionalised a new credit culture Single digit NPL governance approach • Improve customer selection process via Strategic
Slide 30: Outlook & Guidance
FBNHoldings B- Outlook & Guidance
Slide 31: FY 2018 Guidance
FY 2018 Guidance OUTLOOK & GUIDANCE FY2017 FY2017 Q12018 FY 2018 Guidance (guidance) (actual) (actual) ROaE 9 – 10% 9-10% 7.6% 8.8% ROaA 1 – 1.5% 1 -1.5% 1.0% 1.1% Cost to Income ≤55% ≤55% 53.5% 56.1% Profitability and efficiency metrics Cost of Risk 6 – 7% 6-7% 6.4% 4.5% Cost of Funds 3 – 4% 3-4% 3
Slide 32: Contact details
Contact details Head, Investor Relations Tolulope Oluwole Email: Tolulope.O.Oluwole@fbnholdings.com Phone: +234 (1) 9052720 Investor Relations Team investor.relations@fbnholdings.com Phone: +234 (1) 9051386 +234 (1) 9051086 +234 (1) 9051147 32
Slide 33: Appendix
FBNHoldings B- Appendix
Slide 34: Our results at a glance
Our results at a glance APPENDIX Income statement Nbn FY 16 FY 17 y-o-y Q1 17 Q1 18 y-o-y Key ratios1 FY 16 FY 17 Q1 17 Q1 18 Gross earnings 581.8 595.4 2.3 141.0 138.9 -1.6 Net interest margin1 8.8% 8.4% 8.2% 7.2% Net interest income 304.4 331.5 8.9 80.3 75.7 -5.7 Cost to income1 47.0% 53.5% 53.3%
Slide 35: Income statement evolution
Income statement evolution APPENDIX FY 2017 (Nbn) Y-o-Y 15.9% 36.9% 31.3% 5.2% 7.7% 16.9% 33.5% 147.6% 55.7% 178.8% 469.6 138.1 113.7 445.3 238.0 206.8 150.4 56.8 9.0 47.8 1 Interest income Interest expense Non-interest Net revenue 1 Operating PPOP Impairment Profit before tax Tax Profit after tax i
Slide 36: Leading diversified financial services group
Leading diversified financial services group BUSINESS GROUP MERCHANT BANKING AND COMMERCIAL BANKING ASSET MANAGEMENT INSURANCE First Bank of Nigeria Limited FBNQuest Merchant Bank Limited FBN Insurance Limited • FBNBank (UK) Limited • FBNQuest Asset Management Limited FBN General Insurance Limited
Slide 37: FBNHoldings' global footprint
FBNHoldings’ global footprint APPENDIX Nigeria France Ghana Guinea Name Name Name Name FBN Holdings Plc. FBNBank UK Ltd. FBNBank Ghana FBNBank Guinea Type Type Type Type Licensed financial holding Bank branch Licensed Bank Licensed Bank company Established Established Established Established 2008 19
Slide 38: Definition of terms
Definition of terms APPENDIX ₋ Cost-to-income ratio computed as operating expenses divided by operating income ₋ Leverage ratio computed as total assets divided by total shareholders’ funds ₋ Loans to deposits ratio computed as gross loans divided by total customer deposits ₋ Net interest margin def
FBN Holdings — FY2017 and Q1 2018 Earnings Presentation on 6ix